Learn how to create a compelling business case for a large-scale migration to AWS. We present a framework and tools for creating your business case, and guidelines for using AWS services to maximise value and optimise cost for migrations to the AWS Cloud. Learn a new way of thinking about cost that includes factors such as automation, new technologies and organisational change.
Andrew Boyd, Enterprise Account Manager, Amazon Web Services
Hello everyone, what a great audience we have today.
So I am Andrew Boyd and I work in the Amazon Web Services Enterprise team.
My focus in this role is to help Enterprise customers who are just staring their journey to cloud to realize the benefits of cloud adoption as quickly as possible.
1 min (8)
When we look at the cloud journey, this really fits into the executive sponsorship and Program ROI and planning phases.
The reason I am here to talk to you today about building a solid business, is that I see customers spending a lot of time developing a business case and it’s a key blocker and area where spend a lot of time trying to get right.
And I want to help you get through this process as quickly as possible and get delivering results. I’m convinced!! I’ve seen the benefits for businesses in migrating to cloud and using this to transform their business and they way they work in delivering not only the way you work, but also the way you deliver for your customers.
Look at some of the amazing examples of businesses using cloud to transform their business. GE oil and Gas moved to cloud, in the 18 month project to do so they made a 52% reduction in the Total cost of ownership. Yes that’s right a hundred year old traditional business saved over 50% of their costs. But at the same time they had a 98% reduction in P0 / P1 incidents and were 77% faster to deliver business applications. Yup the benefits are real.
Now I’ve worked across start ups and enterprise and have a bit of experience in how you might build these business cases across different organizations. We are all in the same boat. We’re prioritizing where to spend the money to get the best return for our investment. And when you look at that if you have no regard for time or for money you could solve any problem, but you would probably solve it in a really uninteresting and expensive way.
So then lets use this session to talk about how do we leverage cloud to build elegant cost effective customer solutions that drive our business forward.
So how many of you have built a business case for a project in the last 24 months…
Cool so were in the right place and thinking about how to do it better.
So then I’d like you to raise your hand if the project that the business case was about was delivered on time and to budget meeting the business outcomes?
1 Mins (3)
So over 60% of projects that you work on this year will fail.
That kinda sucks doesn’t it? Imagine if surgeons in hospitals had the same failure rate? We would not accept that right.
So first lets dive into what we mean by fail. Well in this instance the measures are pretty clear. Do you deliver the planned outcome or features on time time and to budget? When you look at the averages. In the data behind this we start to see that on average only 69% of features are delivered, with an average cost over run of 59% and a whopping 74% over run on time to deliver.
I’m sure lots of us have experienced those projects that don’t really deliver the results we’ve envisaged in our time. And I’m not sure about you, but to be honest I see a lot of projects not even going back at the end to measure their success.
1 Mins (4)
So HOW do I build a business case to move to cloud and more importantly, one that doesn’t fail?
Well first of all don’t worry! Today I’m going to walk you through the process of building a cloud businesss case in all of its complexity, but Relax this isn’t one of those ridiculously hard to solve problems that requires rocket science and millions of dollars to fix.
There really is a simple formula that allows you to look at the way you plan for your cloud migration, build the right business case and deliver the outcome. And we are here to support you every single step of the way.
We have helped millions of customers so far realise the benefits of moving to cloud.
So lets break this problem down.
What I want you to first think about is how do I best build a business case that is sucesful?
Consider this data point
2 mins (6) When we dig deeper into projects fail we can see a stark statistic.
90% of large projects fail, but there is light at the end of the tunnel here as 76% of small projects succeed.
Now a large project in this scenario is one where we invest over $10m in labour compared to a small project which has Less than $1m in labour.
So what this really tells us is that we’re better of breaking large projects down into small ones! Seems logical right, the shorter and smaller the project the better we are able to forecast into the future and deliver what we say.
So what sould you do.
Focus on smaller projects,
To test and learn,
To measure and interate.
Ok so that’s my advice – wherever possible avoid a big all encompassing business case. Build a case for a proof of concept. Execute an proove the concept or learn and iterate… Get FEEDBACK from your customers. Wherther they’re internal or exteranal and iterate again.
It’s the most cost effective way, by iterating and improving you reduce the latency in the cystomer feedback loop. You create small projects, that have more chance of delivering what youre customers want and you suceed at more of them.
So if I stop there and you go and do that. We’re done ok.. So if you feel that’s achievable in your organization right now, please go ahead and get going.
But if you're like most businesses, you need a funding bucket to draw down on and you need to secure resources to do anything and so that doesn’t help you.
So lets find a way to help you too…
Lets discuss the components of a business case, highlight what typically gets missed and give you a blueprint of things to add to your cloud business case.
1 min (7)
OK so you have got to build a business case, so lets start with the basics
A business case is trying to secure an investment now to deliver future savings and benefits.
So going back to my last point, you want a funding bucket to draw down on, could you do this? Literally like don’t go for a project business case, but instead ask for an innovation budget, to experiment and innovate.
For micro investments like this sometimes a traditional business case is not the right mechanism.
1 min (9)
When we look at the most successful they have a common set of characteristics.
They are small and targeted with measureable outcomes
They are ??
2 mins (11)
Why are you building this business case, Who is it for?
Are you seeking project funding?
Do you even need a business case?
Prioirtise WHY you are doing this – do you need to save money as quickly as possible. Do you need to launch more innovative products to keep up with the compeition.
Use these whys to shape how you build the business case
Is it developer productivity Is it system reliability
DEFINE THE SIZE OF THE PRIZE
WHETHER YOU HAVE A DIRECT board level of exec directed to reduce cost Requirement to move quickly and enter new market Re-invent and adress an increasing competeive threat
Or in qantas case whether you’re looking at an opportunity to do all
Recuce cost of fuel
Open up net new routes for flights as a differntaitor
And offer a more personal customer experince
All theese are valid why reasons…
Close – you can not underestimate the importance oF WHY your doing tis as change is hard and unless you truly believe in the why you’ll be a statsistc
1 min (12)
0 min (12)
1 min (13)
So lets look at base operational platform – its that good old apples for apples not apples for oranges comparison that everyone loves to see.
But before we do this I want you to know…
Apples for Apples or a lift and shift migration to cloud leaves xx% on the table!
But it can still be pretty compelling. Even just to compare the cost of your data center to cloud.
So it’s a good first step CHANGE TO APPLES TO APPLES THIS SERVERLY UNDER ESTIMATES THE CHANGE THAT
1 min (16)
A Base platform analysis typically includes:
Comparing the costs of running an infrastructure environment or specific workload/application on-premises or in a co-location facility to AWS
Calculating the cost of migration - Assuming a lift and shift
And we make this easy – for simple projects on our website we have the ”TCO modelling tool”
But if your doing a project – call us – email us – we’re here to help
Now for some projects you might do this analysis – and stop. Lets go back to what your objetives are. If you need to move as quickly as possible into cloud to bank those savings – you might do this analysis and its so compelling that you’re done.
But if we go back to our energy company example – well its not enough – how does this help me improve relaibility, get better at managing the profit between the buy and sell price of energy and deliver new ways to engage my customers that reduces the impact of disruptive pleaysers…
Or maybe even this doesn’t stake up in terms of savings… so lets consider apples for oranges shall we!
1 min (14)
1 min (15)
1 min (17)
2 min (19)
Compare your current on-premises environment to your future state re-architected AWS environment, NOT a replica of what exists today. Image
Not apples to oranges –
Comparing a horse to a car not a car to a car!
GUYS come on get real.
JUST COMPARE THE COST PER GB..
YOU ARE MISSING THE POINT THIS IS NOT AN INFRASTRTCURE BASED TCO MODEL…
WE ARE FACING THE BUSINESS CHANGE IN A GERNATION
BUSINESSES ARE BEING DISRUPTED FASTER THAN BEFORE
DON’T UNDERESTIATE THE COMPLEXITY
WE’re not comparing the same sized fruit that’s the same size and eight and a diffret colour an yeah takeste a little different..
Don’t under estimate this..
2 min (21)
Amazonian language that says and speak personally – when I speak to my customers – the universal truth is we want you spending the least amount possible on our platform… but that doesn’t mean its easy
So let me take you through the commercial leavers that e have that we have to help optimise
I don’t want you to spend 1 cent more than you have too…
Universla truth in retail is that everyone wants a lower price and at amazon we want you to spend lowest possible on platform to reap the most valeu
I’m going to start with price –
Many different commercial models that can be used
The thing that makes it more tricky
Even for a single application you may use more than 1 model
So its important
On-Demand - it’s the most expensive way and it is also the most flexible – useful for pocs sprint sor peaky and for that youre willing to pay a premium
RI’s – long running 24x7 applications – databases always running all your app servers and a proportion of your web servers too the bare minimum in off peak load – you should be using RI’s to reduce the cost by around 40% when compared to RI..
Dedicated – BYOL and the fact that youre not sharing the host with another tennant – which can sometimes be a requirment in a government type scenario but from a commercial perspective with ISVs that don’t support multi tennancy
Spot – its is my favourite but also complicated. It’s the model where you can bid on unused capacity in aws region and get up to 90% discouunt… The trade off is that you could lose that at any point. So youre not running produciton or SAP on tht, but you may be doing large scale computtional bathc processing throiw huge compute at a problem in order to increase decision agility…
GENERALLY WHAT WE FIND IS A MATURITY – MOST MATURE CUSTOMERS ARE USING
PR Data point spot in 2017 vs 2012
Reflection of mature customers moving to highly optimised…
1 min (23)
At AWS you have lots of choices, many different families and size model.
We have a t-shirt model – XXL
Auto scale increments….
Name like an M or an X2 or whatever
2 min (25)
Auto scale – smaller instances
FREE as part of the platform
SCALE UP when you need it and MOST IMOORTANTLY SCALE DOWN WHEN YOU DON’T
CUSTOMERS CAN REAP ENORMES SAVINGS
SCALE DOWN during OFF Peak
If you tie to fit then you can make sure 2 small is the same as 1 medium – very linear scale…
Just cos you need a bigger box… scale
2 min (27)
We released over 1000 features and services last year
Many of these can completely redifine how you can solve a problem in the
Lambda moving to servlerless
Replacing small EC2 servers to process cron jobs removed and can be replaced with a serverless archietcture
Replace DB with RDS reduce Database admin
1 min (28)
LOOK AT THESE 4 THINGS EVERY 90 DAYS
Create a cadence of REVIEW
1 2 3 4
1 min (29) SO now we have the cost to operate in the cloud… in an optimised and un optimised mannor
How do we get there??
Self fund - we see that
Sometimes youre going to have to ask for an investment
Size change and scope
You may end up both
Early stages self funding projects and move quicker
May be a point where you consider a larger trnasformaiton
Where you may need to account for cost of change
What are some of the things you consider
In many cases people think its migration
Have you considered enablement of people
Investment in change of culture
Not necessarily a hard monetary investment sometimes they an investment in time communicaiton and people….
1 min (30)
So how do you do this.
Engage a partner
Engage Amazon pro serve
Lets get some tools in to automate
We can give you some basic costs per server
Way you can help reduce these things
Wide variety of partners to help accelerate the outcome
It may appear more upfront actually over term outcome is reaped quicker
I sat at reinvent and loads of execs not one of them said they had wished tehyd done it slower!!
Buy in from business
Take a look at the market place
Pay for the duration of the project
1 min (31)
Value of experience
Cloud adoption framework
Across the many transofrmations what we have found is…
Becase the changeyou need to consider these things
Here are the things our PS team look at when they drive transofrmaiton
2 min (33)
1 min (34)
0 min (34)
So ow you're in the cloud
But what are the other benefits we need to consider??How do we deliver Business Value
1 min (35)
Tangible cost savings associated with migration to the cloud are not the only benefits to be gained from your cloud transformation.
Quantifying the business value that the cloud can have on your business and your bottom line can lead to a solid business case, thus helping to create a greater urgency to accelerate your cloud journey.
Add a statistic here
3 min (38)
This is where we can spin up and experiment with new business infinitives
AGILITY - HARD TO MEASURE
Rapid and less expensive experimentation Faster application development Faster business decisions = faster time to market